The legal auditing industry endeavors to accurately audit legal bills according to best practices and litigation billing guidelines to ensure accurate and timely payment of invoices. To achieve this, rules and guidelines are established for individual clients that are followed when evaluating an invoice. Electronic legal billing standards have been developed by different entities, such as the American Bar Association.
The advent of electronic billing has prompted corporations and insurance companies to require that law firms send their invoices electronically. Generally, each invoice is comprised of separate tasks performed on each matter by law firm personnel and the expenses associated with that matter.
Corporations and insurance companies audit these electronic invoices or employ a third-party vendor to audit the electronic invoices. In order to eliminate the need for a human to inspect each individual line entry, automated rules engines have been built to analyze the law firm invoices and reduce any line entry that may have not conformed to the legal billing guidelines.
The result of the automated rules engines is that law firm invoices are being reduced significantly, and in some cases, inaccurately. The auditing software can inappropriately identify a line entry or line entries on the invoice as being non-compliant with the billing guidelines, thereby either requiring the law firm to modify the line entries on the invoice, or accept reduced payment. While there are systems designed to reduce the value of law firm invoices, there are no systems designed for the law firm to pre-screen their invoices in order to prevent line items on the invoice from being reduced or to check the invoice for inadvertent omissions where a law firm neglected to bill for a task or activity performed on the matter.
There is a need to provide a pre-screening process for law firm invoices to ensure that law firm invoices accurately describe the actions taken.
There is a further need to provide a law firm report to increase the effectiveness of their billing practices.
There is a further need to provide a law firm report to evaluate average rates charged by law firms on specific types of legal matters in all geographic areas.
There is a further need to provide a law firm report to evaluate which tasks are being reduced by a specific company or legal auditing system.
There is a further need to provide a law firm report that evaluates the average cost to defend a certain type of legal matter in a specific jurisdiction.
There is a further need to have a budgeting module which will allow firms to accurately budget for a specific type of case in a specific jurisdiction.
There is a further need to provide a data warehouse for a firm's legal billing.